This has been something that I’ve been thinking about heavily for the past few years. There is a trend in Silicon Valley that has been under-appreciated in the press, but nonetheless has rapidly swept through technology companies in the Bay Area. It may not be buzzword-enabled (yet), but it nonetheless may be a truly transformative event for our industry.
More and more companies seem to be thinking of IT as a human resources benefit.
(If your eyes just rolled back in your head, stay with me for a second. This is a big deal.)
Historically, IT has been positioned as one of two things in the enterprise:
- Cost Center. In this model, IT technology and services are a required cost of doing business and being competitive, but don’t add any differentiation versus your competitors. As a result, IT is managed by cost, and the goal is to provide “sufficient” productivity compared to other comparable companies at the lowest possible cost. In this frame, every software purchase, every hardware purchase, every investment in training or personnel is evaluated based on price.
- Productivity. In this model, IT technology and services are seen as productivity enhancements, and potential differentiators. Here, investments are made based on an Return on Investment (ROI) justification, where the benefits can include saving time and/or people, or potentially boosting output or revenue. In this frame, there is a heavy bias towards technology that allows people to get more things done, more quickly, and with fewer errors.
Both of these models tend to heavily favor technology that is cheap. What they don’t favor is technology that is enjoyable to use. This has led to many decades of enterprise technology that is sold to decision makers at the top of the organization, and rolled out to reluctant employees who bear the brunt of the cost savings and/or potential productivity gains.
I had never considered that there might be a third model until a blog post about IT at Google surfaced in 2006. [Note: I hope someone can find this URL for me – I’ve tried with no luck tonight]. This post wrote about how Google set up stations on every floor, with surplus batteries and machines to make swapping out faulty equipment a breeze. It talked about giving employees a choice of platform to work on. Most importantly, it talked about thinking about IT as an HR benefit.
IT as an HR Benefit
When you think about benefits in a human resources context, there is a very different frame of reference. In business school, students who take incentives classes learn about different forms of compensation and their impact on psychology. In theory, benefits need to justify their existence in some way beyond straight cash compensation. Sometimes benefits are required because competitors offer them. Sometimes benefits are offered because it’s cheaper, due to taxes or bulk purchasing power, for the company to buy them than the employee. Benefits can be long term, or reward certain types of behavior. In some cases, benefits are offered because people actually appreciate them more than the equivalent of cash.
In most companies, while benefits are in the end a cost center, they are factored into the general budget and philosophy around compensation of employees. As a result, more often than not, benefits tend to compete with each other. Given a compensation budget, what percentage of dollars will be spent on salaries vs. bonus vs. benefits? Would employees prefer a 401k match or transportation vouchers? Charitable contribution matches or gym discounts? Who benefits from each program, and how much? Will the benefit help with recruiting new employees, or with employee satisfaction and retention?
When framed as an HR benefit, IT comes under a whole different light. Consider:
- What percentage of your employees time is spent in front of a computer?
- What is the relative cost of newer, more enjoyable technology over the “base model”?
- How much would an employee appreciate dollars spent on IT technology vs. other benefits?
- How does your technology affect your internal corporate culture?
These are very different questions than the ones that tend to drive historical cost-driven IT decision making.
In this model, you might get everyone a 24″ flat panel monitor instead of a 20″ monitor. Why? Because as a benefit, this might only cost $50 per employee per year, and they would appreciate it far more than the dollars themselves. And they would appreciate it for hours every single day. In fact, they might want to stay at work longer to use it compared to the machine they have at home.
In this model, you might give everyone the choice of mobile device (Blackberry, iPhone, Android, etc). Of course, it would cost more in software support and development, but allowing employees to use the device of their choice might be appreciated every single day. It also might make them a little more reluctant to consider working in an environment where they are forced to use a less-preferred platform.
LinkedIn
At LinkedIn, our IT department provides a wide range of choices, which we actually advertise on job postings:
- Choice between Mac or Windows environment
- Choice between laptop or workstation
- Choice between two 24″ displays or a single 30″ display
- Choice between iPhone or Blackberry
Do these technologies boost productivity? Absolutely. Do these technologies cost more than a homogenous, lowest-cost environment? Absolutely.
But when you look at this list, it’s hard not to see them as benefits. I see new employees every day, almost giddy when they first get their first laptop and 30″ display, or a tower with 24GB of RAM. I hear people with guests at lunch brag about how LinkedIn lets you have an iPhone or a Blackberry.
Many of these employees spend anywhere from 4 to 10 hours with this equipment every day – is it any wonder that they perceive these as benefits?
Thoughts for the Industry
The question I have is, how pervasive is this trend? For most office workers, any computer offers sufficient speed and available software. In the consumer market, with the resurgence of design-based thinking, we’re seeing more products and profits driven by quality of the experience rather than quantitative metrics or feature checklists. Will it spread to the enterprise? Will employees demand it?
Many great professionals that I know in IT long to provide better products and services to their fellow employees. Maybe this is the opportunity for IT & HR professionals to work together to reframe the way we justify technology at work.
Psychohistory 